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TWN
Info Service on WTO and Trade Issues (Nov21/24) Geneva, 22 Nov (D. Ravi Kanth) — Among the several issues that are hanging in the balance at the WTO’s 12th ministerial conference (MC12) that starts in less than eight days, the one on the 1998 work program on electronic commerce involving the moratorium on customs duties on electronic transmissions is proving to be the most intractable, said people familiar with the development. The battle-lines seem to be drawn in the negotiating sand between many members, including the United States, who are currently engaged in the informal plurilateral Joint Statement Initiative (JSI) on digital trade, on the one side, and India, South Africa, and several other developing countries, on the other, according to people familiar with the development. Earlier, on 8 November, India and South Africa circulated a proposal, titled “The moratorium on customs duties on electronic transmissions: need for clarity on its scope and impact,” stating unambiguously that “it is important for member states to review the decision taken in 1998 to have a moratorium on customs duties on electronic transmissions. This decision was taken with no consensus on the scope of the moratorium and no notion on how the digital revolution will unfold.” India
and South Africa argued that “in December 2019, members had agreed
to extend the moratorium for six months up to June 2020 and re-invigorate
the work under the Work Program on Electronic Commerce which requires
structured discussion on trade-related issues related to global e-commerce,
taking into account the economic, financial and development needs
of the developing The two countries said “in order to enable the WTO Membership to take an informed decision at MC12 on whether or not to extend the moratorium on customs duties, it is necessary to have complete clarity on the definition of electronic transmissions, consensus on the scope of the moratorium and a comprehensive understanding of the impact of the moratorium.” On 18 November, India introduced a draft ministerial statement, saying that due to “the deep digital and technological divide afflicting developing and least developed countries and noting the need to address the same”; the “uneven spread of global electronic commerce and inequitable gains arising from the digital economy”; and “the importance of work under the Work Programme in examining trade-related issues relating to global electronic commerce, taking into account the economic, financial, and development needs of developing countries”, it proposed that ministers “agree to re-invigorate the work under the Work Programme on Electronic Commerce, including the development-related issues under it, based on the mandate set out in WT/L/274.” “We instruct the General Council to hold periodic reviews in its sessions of July and December 2022 and July 2023 based on the reports that may be submitted by the WTO bodies entrusted with the implementation of the Work Programme and report to the next session of the Ministerial Conference,” said the draft ministerial statement. RESPONSE TO INDIA’S DRAFT MINISTERIAL STATEMENT In what appears to be a response to India’s draft ministerial decision, Australia; Brazil; Canada; Chile; Colombia; Costa Rica; Ecuador; El Salvador; the European Union; Georgia; Guatemala; Hong Kong, China; Iceland; Israel; Japan; Kazakhstan; Korea; Liechtenstein; Mexico; Moldova; Montenegro; New Zealand; North Macedonia; Norway; Panama; Paraguay; Peru; the Russian Federation; Singapore; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Thailand; Ukraine; the United Kingdom; the United States; and Uruguay, on 19 November, called for the current moratorium to be continued until the 13th ministerial conference (MC13) while promising that the re-invigorated work program on the scope and definition of electronic transmissions will be continued. The proposed ministerial decision by these many countries states: “We agree to continue the work under the Work Programme on Electronic Commerce, based on the existing mandate as set out in WT/L/274. We instruct the General Council to hold periodic reviews in its session of July [and December] 2022 [and July 2023] based on the reports that may be submitted by the relevant WTO bodies and report to the next session of the Ministerial Conference. “We agree to maintain the current practice of not imposing customs duties on electronic transmissions until the 13th Ministerial Conference.” Commenting on the proposal by the members of the JSI on digital trade on the 1998 Work Program on electronic commerce, Ms Rashmi Banga, a digital trade expert at the UN Conference on Trade and Development (UNCTAD), said “the question is how can countries ask their Ministers to sign on the continuation of the moratorium if there is no clarity on what they are signing on since the scope of the moratorium is not clear.” She asked, “does the moratorium include those products which have been digitalized as understood in 1998 when the moratorium was agreed or does it also include all services which are being traded online as per the OECD study?” According to Ms Banga, “the onset of the digital revolution has led to an exponential increase in products being traded without their physical carriers and this is adding to the existing tariff revenue losses of the developing countries.” She said that “these digitalized imports have further increased during the pandemic. It becomes extremely important for developing countries to regulate these imports which comprise, to a large extent, luxury items like movies, music, and video games.” Ms Banga argued that “countries are losing their precious domestic financial resources on these imports in a period when these resources are needed for importing life-saving vaccines and other medical-related equipment, especially when the WTO’s developed members have refused to provide the much-needed TRIPS waiver.” +
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